Much to write about

After getting no action on my trades last week, this week has been a rush of activity. On Tuesday, I opened 3 new positions:
CIT July 09 (Strike 2.5) @ 0.45
SNV June 09 (Strike 2.5) @ 0.25
ZLC June 09 (Strike 2.5) @ 0.20
I probably won't close these positions if given sufficient margin of safety as expiry approaches.

CIT is an interesting trade because essentially I am playing the opposite side of buying calls. Someone is buying up June and July 09 (Strike 5) calls on CIT, which is making the 2.5 puts more expensive.

SNV is a value play. Cheap stock, 2.25 is below the 52wk low. I feel safe.

ZNC was an earnings insurance play. I bet that the stock wouldn't fall more than 50% - it didn't. Great. I'm not too worried about this one falling through my strike either.

I've also been making a market in KEY. My positions have reached a critical point where I can make a small profit by buying the bid and selling the ask. However, it's useless to describe these trades because I'm usually out of them within 30 minutes (at least, I try to do that). I've traded KEY 5 times this week for a total profit of $0.10.

Flawed leaderboard

My broker has an online trading network where investors can connect with one another, share experiences, ideas, and strategies, see what others are trading, and how they are performing. The performance leaderboard, which displays the performance of the top members on the network, is a flawed concept. The portfolio performance of people who take on risk through leverage and are rewarded for it will always be greater in the extremes than the performance of lower risk strategies. The amount of people who lose their entire investment through leverage is also high - after all, options expire with time. The leaderboard should show risk-adjusted returns. It scares me to think that people will try to replicate the strategy of some of the top performers without such outstanding returns.

If you're looking for a broker, send me an email and I will refer you to mine. Think of it as a way of showing blog appreciation. :)

It's time to get rich

My last post was on September 13th, 2008. A lot has happened since then. We've seen the collapse and rebound of financial markets, although, let's face it, the market is nowhere near where it was during 2008. Let's talk about the elephant(s) in the room.

Why did I stop posting?
September 22nd, 2008 witnessed the crash of Ambac, by far the largest holding in my portfolio. Since I was losing money for the people who read and followed my advice, I stopped posting it. Yes, I was still outperforming the market, but what was the point of giving my advice if it lost you money?

Why am I posting this?
I'm outperforming the market so much that I am actually net positive since 2007. As of 5/18, the one year performance of the S&P is (34.7%). My portfolio is up 29.5%. I am going to be posting my trades again - and we will all get rich together.

Latest trades:
Sold YCRW July 2009 2.5 strike put @ 0.60
Sold CCRT July 2009 2.5 strike put @ 0.75